Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.


National Bank of Pakistan (NBP) is the biggest commercial bank working in Pakistan.

The balance sheet of NBP is better than all other banks operating locally. The services of NBP are accessible to the government of Pakistan, business units and individuals.

NBP has shown a remarkable financial performance in 2006 with an estimated total asset of over 634 billion PKR. The overall deposits of NBP have grown-up to approximately 502 billion PKR. According to the annual report of year 2006 the bank earned 26 billion rupees before tax profit and the per share value increased to 24.01 rupees.

The increase in profit was achieved through strong growth in core banking income. Interest income increased by Rs10 billion through growths in the loan portfolio as well as increase in spreads. Advances increased by Rs48 billion to Rs316 billion. The Bank maintains a sound loan portfolio diversified in nature to counter the risk of credit concentration. It ranges from providing credit to the un-banked market segment under NBP Karobar, to small and medium enterprises, to agricultural loans, to large corporate customers.

Learning Outcome 1

Types of values, Links to Values, Vision and Mission

One of the key drivers of strategic purpose in an organisation is its values.

Values are part of the organisation's culture - those subconscious assumptions and beliefs that frame its view of itself.


Lencioni , (2002)noted four types of corporate values

Core Values - These are the deeply ingrained principles that govern all the organisation's actions. They are the source of a company's distinctiveness.

For e.g., Hewlett-Packard developed the 'HP Way': trust and respect for individuals, high level of achievement and contribution, uncompromising business integrity, teamwork, flexibility and innovation.

Aspirational values - those values that are needed in order to succeed in the future. Note that here is where a traditional value may be out of step with a strategic value.

Permission-to-play values - It is also called as Threshold values (non-core, non-distinctive). Namely, those minimum standards of behaviour required of people in the organisation, typically as set out in employee handbooks.

Accidental values - Cultural values that are taken for granted but don't really reflect the core or inspirational values.

Core Values of NBP

Highest standards of Integrity

Institutionalizing team work and performance culture

Excellence in service

Advancement of skills for tomorrow's challenges

Awareness of social and community responsibility

Value creation for all stakeholders

Values work together with vision and mission to create the framework of your strategic purpose, from which come your specific aims and objectives.

Sometimes the lines between vision and mission are blurred, but, a vision is an aspirational statement of where the organisation wishes to go, whereas the mission is a statement of current strategic positioning.

The Vision

A vision statement is sometimes called a picture of your company in the future but it's so much more than that. Your vision statement is your inspiration, the framework for all your strategic planning.

The Mission

A mission statement is a brief description of a company's fundamental purpose. A mission statement answers the question, "Why do we exist?"

The mission statement articulates the company's purpose both for those in the organization and for the public.

Vision of NBP

"To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility."

Mission of NBP

NBP will aspire to the values that make NBP truly

the Nation's Bank, by:

Institutionalizing a merit and performance culture

Creating a distinctive brand identity by providing the highest standards of services

Adopting the best international management practices

Maximizing stakeholders' value

Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate

Evaluation of NBP's Vision against its suitability

There are many ways/ tools to evaluate the mission statement of an organisation. I have chosen the five ways suggested by HAMEL and PRAHALAD in year 1994.

These are:


The vision statement of National Bank of Pakistan is sturdy and strong. It has a logical and orderly flow in it. It consists of three parts and all have aesthetically consistent relation. This shows the power of seeing ahead of NBP and virtue of planning. The first part of Vision Statement covers the foreseeing of NBP as it wants to be recognized as a leader and a brand synonymous with trust.


The vision statement has the capacity to understand a broad range of topics. It is according to give response to the change in market places. The third part shows the breadth of the vision of NBP as it is covering international best practices as well as social responsibility.


The uniqueness in vision statement of NBP is that it wants to carry out best international practices in their operations.


The vision of the NBP is consensus as it is possible to fulfil what is agreed in their vision statement and the whole Group like CEOs, Board of directors, VPs are agree on it.


Future opportunities are clearly identified with a proper line of action. National Bank of Pakistan see itself a leader in its filed and for this purpose it will apply international best practices to be recognize as a leader. The core competencies of this organization are highest standard of integrity, team work, excellence in work, advancement of skills for tomorrow's challenges and value creation for all stakeholders.

Evaluation of Mission Statement

To evaluate the mission/ objectives of NBP I have chosen the SMART tool. The SMART analysis of NBP is as following:

S - Specific

The mission statement of the NBP is to the point. It is very clear and understandable. Every point of its mission statement is well defined and logical.

M - Measurable

Here measurable means quantity. To the best of my understanding and knowledge the term Measureable can best fit "if NBP has achieved the targeted revenue, number of branches, number of customers etc. And I think the answer is yes even more than that. Because it is a purely government organisation people have trust in it.

A - Achievable

As one can clearly see that NPBs mission statement recaps the basic strategy to realize the goals of the organisation it states the key goals that the workers should struggle to meet. This declaration is given in very clear points and I think it's very much attainable/ achievable.

R - Realistic

The approach of NBP towards its mission/ objective is very realistic. I mean there is sense of what it states. Like its says to maximise its stakeholder's value, means by providing top quality services and providing its stakeholder continuous profit NBP will do its best to increase its stakeholders' value and improve their life.

T - Time-bound

The time bound factor means it should specify the time when it's going to get these objectives/ missions. As far as my knowledge about the company is concerned NBP has not given any time limit for achieving its missions/ goals.

Learning outcome 2

Stakeholder Analysis; managing expectations

Definition of Stakeholder

Person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies. Key stakeholders in a business organization include creditors, customers, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources. Although stake-holding is usually self-legitimizing (those who judge themselves to be stakeholders are de facto so), all stakeholders are not equal and different stakeholders are entitled to different considerations. For example, a firm's customers are entitled to fair trading practices but they are not entitled to the same consideration as the firm's employee.

Stakeholders of National Bank of Pakistan

Being a very large organization National Bank of Pakistan has a large number of stakeholders. A list of stakeholders of NBP is given below.


Board of Directors


State Bank of Pakistan




Commercial Banks

Other Businesses


Influence of Stakeholders

The shareholders contribute as voters for election of directors after the expiry of their previous terms. They can take part as voters in the election of directors on the specified date in the extra ordinary general meeting of the company announced by the company secretary.

The elected members of Board of Directors formulate strategies for the organization.

State Bank of Pakistan is a regulatory authority for all banks in Pakistan. It monitors the operations and planning of NBP. This regulatory has a strong influence in making the strategy of the bank.

Employees can affect the strategy by their working effectiveness and efficiency. If the employees are more motivated and hardworking then they can achieve the organizational future goals in better way turning it in profitable organization.


This approach is widely used for competitive analysis. It is because of the high intensity of competition among companies there five main competitive forces.

Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one firm can be successful only to extent that they provide competitive advantages over the competitor. These competitive strategies may be lowering prices, best quality series. The NBP offering very low charges an demand draft, telegraphy transfer, mail transfer and give other additional services to the customers and to the Nation because NBP is a "Nation's Bank".

Potential entry of new competitors:

Whenever new firms ca easily enters a particular industry, the competition increases. The gout restriction, tariffs, patents etc can stop new firm to enter into the business as per Banking industry is concerned this market is already very situated in Pakistan and there are banks with quality services and low charges. So there is no threat to NBP from potential entry and NBP is also a public sector bank and no other new banks can take over it

Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other product can be substitute the product of that industry. For example banks offering sawing schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them in this field. If they offer low rates than GPOs so people will go to deposit in GPOs. People concentration high rates so that's why sawing PLS accounts are more then current accounts. The next examples will ATM which substitute presenting cheques at counter and encash it. The NBP is lacking in this field. It must improve in this field to compete the competitors.

Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when there are a large number of suppliers. In case of banks the suppliers are customers they supply the money to banks. Now they must offer good services, quality, and safety and low charges etc to customers. In this field NBP is very good. B/C at offers good quality services to customers. They charge low charges on remittances. So that's it is competitions other banks.

Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining power represents a major force affecting intensity of competition. Now the number customers in Pakistan for banks are very high. Banks is offering variety of products and services to their customers. NBP have a large number of customs. Now it must offer good services and products to their customers to attract them to come to NBP.


External environment

Now we will discuss the external factors affecting the strategic plan of NBP. I have used the most commonly used tool for this purpose that is the PEST analysis.

PEST analysis is a scan of the external macro-environment in which an organisation exists. It is a useful tool for understanding the political, economic, socio-cultural and technological environment that an organisation operates in. It can be used for evaluating market growth or decline, and as such the position, potential and direction for a business.


PEST analysis is a scan of the external macro-environment in which an organisation exists. It is a useful tool for understanding the political, economic, socio-cultural and technological environment that an organisation operates in. It can be used for evaluating market growth or decline, and as such the position, potential and direction for a business.

Political factors: These include government regulations such as employment laws, environmental regulations and tax policy. Other political factors are trade restrictions and political stability.

Economic factors: These affect the cost of capital and purchasing power of an organisation. Economic factors include economic growth, interest rates, inflation and currency exchange rates.

Social factors: These impacts on the consumer's need and the potential market size for an organisation's goods and services. Social factors include population growth, age demographics and attitudes towards health.

Technological factors: These influence barriers to entry, make or buy decisions and investment in innovation, such as automation, investment incentives and the rate of technological change



Privatization policy and deregulation.

Impact of subsidized credit affecting and NCB's.

Employment practices, Unions, Associations.

Political Interference and harassment.

Incidents of high taxation on banking industry.


A SWOT analysis is a simple but widely used tool that helps in understanding the strengths, weaknesses, opportunities and threats involved in a project or business activity.

It starts by defining the objective of the project or business activity and identifies the internal and external factors that are important to achieving that objective. Strengths and weaknesses are usually internal to the organization, while opportunities and threats are usually external.


SWOT Analysis is an acronym used for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are the initial strength and weaknesses of an organization, whereas opportunities and threats are the external one.



NBP in one of the oldest bank of Pakistan and first nationalized bank Hence its customer base is strength from this plus point as customers have more confidence in the bank. The additional value services as the privilege for the bank.


The NBP performs additional services for its customers as well as the other bank customer in the absence of SBP.


NBP has the relative competence in having more deposits than the other bank. This is because of the confidence the customer have in the bank. The bank being the privileged and oldest bank in banking sector of Pakistan enjoys this edge over all others, lacking it.


The employers at NBP are offered reasonable monetary benefit. Normally two bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional benefit and competency for the bank and a source of motivation for the employees.


The bank has another competency i.e. it has broad-basses network of branches throughout the country also more than one branch in high productive cities. The customers are provided services at their nearest possible place to confirm customer satisfied.


The employees at NBP are strict followers of rule & regulation imposed by bank. The disciplined environment at NBP bolsters its image and also enhances the over all out put of the organization.


The employees at NBP here have a good hold on their descriptions, as they are highly skilled Professionals with back ground in business administration, banking, economics etc. These professional competencies enable the employees to understand and perform the function and operation in better way.


The working condition in the NBP branch here is very conductive and favorable for better output. The informal environment affects the performance of the employees in a positive way.


The bank enjoys a good plus point when it comes to the employee manager relationship the hearing as removing of discrepancies if any, between the employees, and between the manager and employees.



The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks far behind in marketing effort .A need for aggressive marketing in there in the era marketing in now becoming a part of every organization.


The strong political hold of some parties and government and their dominance is affecting the bank in a negative way. They sometime have to provide loan under the pressure, which leads to uneven and adjusted feeling in the bank employees.


The promotions and bonuses etc in the bank are often powered by senior's favoritism or depends upon their wills and decision. This adds to the negative factors, which denominate the employees thus resulting in affecting their performance negatively.


The bank falls far behind when the innovative and new schemes are considered. It has not been involved in the tug of war between the competitors to the accounts and strengthens the existing customer base. This stands out to be the major incompetence and weakness of the banks.


During the rush hours, the bank is founded out to be a total flop to handle the mob of people peaking from windows and doors. The bank has deficiency to operate in the stages of rush hours where the people find them services entangled in a situation of nowhere because they are not well served.


The bank lack the strength of being powered by the network of computers, which have saved time, energy and would have lessened the mental stress, the employees have currently. This would add to the strength if it were powered by network of computers.


The bank lacks the modern Equipment that is note counting machine computers. Even if there is any equipment they lack to fall in the criteria of being rearmed as update and upgraded


The workload in NBP is not evenly distributed and the workload tends to be more on some employees while others abscond away from their responsibilities, which server as a demotivation factor for employees performing above average work.



The world today has become a global village because of advancement in the technologies, especially in communication sector. More emphasis is now given to avail the modern technologies to better the performances. NBP can utilize the electronic banking opportunity to ensure on line banking 24 hours a day. This would give a competitive edge over others.


Because of the need for micro financing in the market, there are lot of opportunities in this regard. Other banks have already initiated, now the time has arrived when the NBP must realize it and take on step to cater an ongoing demand.



The bank is facing threats with the emergence of new competitors especially in terms of foreign banks. These foreign banks are equipped with heavy financial power with excellent and innovative ways of promoting and performing their services. The bank has to take initiative in this regard or will find itself far back in competition.


The ongoing shift in power in political arena in the country effects the performance of the bank has to forward loans to politically powerful persons which create a sense of insecurity and demoralization in the customer as well as employees.


The bank is currently acting upon the policy of downsizing which threaten the environment of the bank Employees feel insecurity in doing their jobs and work, hence affecting the over all performance of employees negatively.


There exists no regular and specific system of the removal of customer complaints. Now a day a need for total customer satisfaction is emerging and in their demanding consequences customer's complaints are ignored